The National Association of Property Buyers is warning tenants to prepare for soaring rental prices in 2023. The property experts predict that rents may rise by four per cent in the New Year, largely due to a record five-year low in property supply.
An Affordability Crisis
Jonathan Rolande, NAPB spokesperson, said these rises would exacerbate affordability issues already being faced by a large proportion of UK tenants. The association has been around since 2013 and aims to maintain high standards within the property buying industry. More information on this can be found here.
He said market forces are pushing up rents as rental property stock is at the lowest seen since 2017. He said that landlords have been hit by changes to legislation and a rise in costs for agents after the ban on tenant fees, the hike in interest rates and the economic climate following Liz Truss’ failed budget, together with tax increases are all having an impact on the rental market.
Rolande said that recent months had seen what he termed a ‘landlord exodus’ and predicted that this is likely to continue. He added that worries over rent controls in the English capital had the potential to spook the London rental market, further reducing rental stocks, along with Welsh rental restrictions.
He said that wage stagnation and rent rises were leading to tenants facing increasing hardship, forcing them to lower their expectations when it comes to their rental potential.
Rolande said that both landlords and tenants were facing a difficult period at the current time, adding that discussing an ‘us versus them’ scenario was unhelpful in today’s climate. He said that landlords were often portrayed as bad guys, but they are also facing significant pressures and almost a quarter (22 per cent) have said that stress has been responsible for them experiencing mental health issues. Tenants, meanwhile, quite rightly feel vulnerable and this leads to an assessment that the current situation is failing to work well for all parties, he said.
Rising Rents
Whilst some people will start the new year taking their first or next step on the property ladder and looking for the best conveyancing solicitors Rugby and engaging companies such as Sam Conveyancing to help them complete purchases across the UK, renters face an even bleaker start to the New Year. Hamptons, the lettings agency, said that five regions of the country have already seen average rents moving into new price brackets over recent weeks.
For the first time, Greater London has seen rents going above £2,100 per month in October. This has been sparked by inner London rents also hitting a new high in the same month. Here, average rents are now passing £2,863 a month. This is a pound more than the October 2019 price peak for the priciest postcodes in the Capital.
All average rents around the country have now gone over the levels seen at the start of the global Covid pandemic, with Britain seeing an average 19 per cent rise since January 2020. This amounts to an extra £2,351 in rental costs per year on average.
Hamptons said that rental growth has occurred at a greater rate since the start of the Covid pandemic than had been experienced for at least eight years before.